Top destination for global investments
Every year, over 1 trillion USD is distributed around the world in a form of foreign direct investments. Investments coming from foreign investors and entrepreneurs are of significant value to the country and are considered as a sign of healthy economic, political and legislative environment. When it comes to investing your money, some countries are simply better than others. It depends on numerous factors, such as the overall economy and growth opportunities of the country, political stability, taxation and overall legal system, the complexity of company formation, bank account opening and workforce.
In this article, we will summarize three jurisdictions in terms of benefits and other features crucial for foreign investors. These countries have already proven to be able to attract multinational businesses and other investments, but when it comes to choosing the right place for your investments each country is different and might be better than others in one or more factors.
The first country to analyse is Singapore as it takes the 2nd place among the best countries to invest in and the 15th place among the best countries in the world in the US News Best Countries Ranking developed in cooperation with its international partners.
Located in Southeast Asia, Singapore is a bustling metropolis and a home to one of the busiest ports in the world. As one of the four economic tigers of Asia, the country has experienced an impressive growth in the recent past due to efficient production and manufacturing practices and innovations in pharmaceutical and electronics industries. High GDP per capita and low unemployment place Singapore among the wealthiest countries in the world.
- Due to its impressive growth, along with growing immigration Singapore attracts best professionals for its workforce. The country offers cultural diversity and with four official languages is an important gateway for international trade.
- Corporate tax rate is 17% but can be reduced if taking advantage of numerous government subsidies, incentives and other schemes.
- Legal system of Singapore is recognized for its integrity, efficiency and fairness making the country better than many others as a place for starting and operating a business. World Bank group has recognized Singapore’s political and regulatory environment as the most business-friendly in the world.
- Other factors:
- Least corrupt country in Asia;
- Best IP protection in Asia;
- Most popular country for arbitration in Asia.
United Arab Emirates
The United Arab Emirates or UAE is listed as the 22nd best country in the world and is not mentioned among the best countries to invest in according to the ranking mentioned above.
Before discovering oil in the middle of the 20th century, UAE’s economy was mainly based on fishing and pearl industries. The country experienced a rapid growth and overall transformation along with the beginning of oil exports in the 1960s. Nowadays, the country’s GDP can be compared with those of leading European countries and World Economic Forum has named UAE as the most competitive place in the Arab world.
- When establishing a business in UAE, foreign investors are able to choose between offshore or onshore registrations depending on which suits better for the business nature and planned activities. Onshore registration means that the investor establishes a business presence in the UAE mainland. Meanwhile, offshore registration typically refers to a business presence in one of the free trade zones of the UAE.
- The UAE does not impose a corporate income tax on a federal level. However, most of the Emirates have some taxation in place for corporate income and can reach even 55% for certain industries. In practice, corporate income tax is mainly imposed on gas and oil companies as well as branches of foreign banks.
- Other factors:
- UAE is among the Gulf’s most liberal places with legal system allowing the freedom of religion;
- No sales tax or VAT, but with plans to introduce in the future;
- In addition to traditional banking, recently Islamic (or sharia-law compliant) banking has witnessed a tremendous growth.
Hong Kong is a special administrative region of China. While Hong Kong is often considered as a separate entity from China, it is not a country and therefore enters all lists and rankings under the name of China. China takes 26th place among best countries to invest in and 20th place among best countries in general.
- Hong Kong’s legal system is characterised by the strict adherence to principles and the rule of law. It operates a free trade economic system and promotes minimal government interference in most sections of the economy. This reflects on the small number of tariffs and duties on traded goods and therefore it is a better place for investments than other parts of China.
- Foreign investments are attracted by promoting a favourable investment climate with low taxes, few restrictions and additional incentives to encourage investments. Corporate profits tax rate is 16.5% with a possibility to waive 75% of the tax. There is no tax levied on dividends.
- Company incorporation is a simple and fast-forward process. All applications for company incorporation also include an application for the business registry. The application can be submitted online and the processing generally takes one hour (as opposed to four days if the application is submitted in hard copy).